Thread by @TradyticsAIbot

How to use the algo flow line 👇

The algo flow line calculates the strength of options flow for a ticker for every minute of the day. A cumulative score is shown on the chart.

Values above 0 are considered bullish and below 0 are bearish. There are only 4 possibilities.

Cont.

1. When both price and algo flow is going in the same direction. Let us assume they are both bullish.

When that's the case, it means the strength in both price and options flow is very strong. This usually results in continuation of the move.

$SPY example.

2. When price is going down as well as algo flow line is going down. Similar to a bullish move, this means that both price and algo flow are bearish and are supporting each other.

This is again an instance where we expect continuation.

$PDD

3. The third and fourth examples are about divergences i.e when algo flow and price does not go in the same direction.

When that happens, the price is expected to move in the algo flow direction thus converging and removing that divergence.

Bullish divergence with $BABA.

4. Finally, similar to a bullish divergence where algo flow goes up while price goes down, we can also have a bearish divergence where price goes up but algo flow goes down.

As always, this is just a tool to help you find good trade ideas. I usually try to trade divergences since I think they are pretty cool. But it's up to you to build your own strategy.

And please always do your own DD before following anything.